Important victory for Repsol in court. The energy company managed to convince the National Tribunal to consider part of its arguments, which allowed it to avoid much of a demand of more than 100 million euros from the Treasury, according to legal sources close to the case. Specifically, the company led by Josu Jon Imaz opposed a resolution of the Central Economic Administrative Court (TEAC), which rejected another previous corporate tax claim that the oil company paid between 2010 and 2013.
The Revenue Agency has opened an inspection against Repsol for the deductions applied regarding losses recorded in Algeria, Libya, Ecuador and Peru, countries in which the company has carried out and continues to carry out crude oil exploration and production activities. The sources consulted indicate that the Treasury changed some technical criteria and decided that these deductions could not be applied to the profits tax, so it established that the company had to pay 101.5 million euros.
Repsol objected to these findings and blocked the liquidation. Since the administrative court dependent on the Treasury did not take his arguments into consideration, he decided to turn to the national court, which accepted some of the requests.
Specifically, the Litigation-Administrative Chamber that resolved the case established that the losses of the factories in Algeria and Libya are deductible. This means, according to the sources consulted, avoiding the payment of a large part of these over 101 million euros. However, it maintained the criterion for plants in Peru and Ecuador, where Repsol still has to pay a portion of the debt to the Treasury.
Repsol sources declined to comment and did not confirm whether they will appeal the ruling, handed down on October 9. The ruling specifies that they had 30 days to appeal. Revenue Agency sources declined to comment and have not confirmed whether they will appeal the ruling, which results in a revenue loss of several tens of millions of euros for public coffers.
Although on the economic issue Repsol can avoid most of the claims with this ruling, the court ruling rejects most of the issues raised. The National Court does not allow pending deductions, nor the application of the double taxation deduction, nor the deductibility of late payment interest, nor the deductions for Peru and Ecuador. However, partially accepting the appeal (deductions for losses in Libya and Algeria) does not impose procedural costs.
In addition to the previous tax dispute, Repsol has other disputes with the tax authorities in Spain. Specifically, the company describes three procedures that are still alive. “In relation to corporate tax for the years 2017 to 2020, the Central Economic-Administrative Court rejected the appeal presented for the issue relating to tax credits for activities and investments abroad. An appeal was presented to the National Court against the administrative resolution”, specifies the company chaired by Antonio Brufau in the latest half-yearly report presented last July to the CNMV.
“In relation to the regional appeals of the Hydrocarbon Tax (financial years 2013-2018), the majority of them are still pending before the National Court, although two rejection sentences have been received which will be appealed before the Supreme Court”, adds Repsol in the documentation sent to its investors.
Finally, the energy company explains that “in relation to the Temporary Energy Restraint registered in 2024, a verification procedure has been started which, like the verification relating to the 2023 financial year, will be concluded without the imposition of sanctions, and with discrepancies regarding the inclusion of some operations in the calculation basis of the Restraint”. This tax that the current Spanish government established between 2023 and 2024 has generated great controversy between companies and the executive. Repsol has been one of the most belligerent, as it is the largest contributor to this tax. The company paid 443 million euros in 2023 and another 335 million euros in 2024.
The Executive also considered making this tax permanent and paying it again in 2025. However, the government did not gain enough support in parliament for this tax to be applied, as happened with the banking sector. Among those who opposed it was the PNV, a party that is usually a partner of the government but which has large energy companies such as Iberdrola or Petronor (owned by Repsol) on its territory.
